Tuesday, June 12, 2007

U.S. Supreme Court Rules Against Philip Morris Removal of "Light" Class Action

Article in the Wall Street Journal -- High Court Rules Against Philip Morris, by Jess Bravin and Mark H. Anderson.  Here's an excerpt:

The Supreme Court rejected a gambit by Philip Morris Cos. to move a consumer lawsuit out of state court and into the federal system, a defeat for the tobacco company, which will now have its case heard in front of a presumably less-friendly Arkansas state judge....

The tobacco case, a proposed class-action filed in Arkansas state court, alleged that Philip Morris misleadingly advertised "light" cigarettes as delivering less tar and nicotine than they actually did. Philip Morris, a unit of Altria Group Inc., sought to remove the case to federal court, which many corporations perceive as more friendly to business interests.

Since 1999, Altria has succeeded in having a large number of pending cases switched from state courts to federal courts, where some have been dismissed. Some of the biggest verdicts against Philip Morris and other tobacco companies have arisen out of losses in state courts.

In this case, Philip Morris invoked a federal law dating from 1812 that allows removal to federal court when a private party is acting under government direction. Philip Morris argued that it was following a test prescribed by the Federal Trade Commission determining the tar and nicotine content of the light cigarettes. Removal to federal court requires more than "simply complying with the law," Justice Stephen Breyer wrote for the court.



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